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The World Benchmark Study of Business Incubators & Accelerators 2019 - 2020
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Brexit’s positive effect on tech startups in Britain

 

So the next 5 years, particularly in the United Kingdom, are going to be very, very interesting. Of course, we’ve got Brexit, the world is changing, the United Kingdom is changing and the universities that we incubate businesses for are going through profound changes.” Simon Bond, Innovation Director, SETsquared Partnership, Bath, United Kingdom

Unless you have been living under a news-blackout, you are aware of Brexit. Maybe not what it entails, but that it is affecting the United Kingdom with regard to everything from trade to global warming. Essentially, Brexit is the departure of the United Kingdom from the European Union, decided upon by a majority of the electorate who voted for the proposal in June of 2016. Since then, the country has experienced ups and downs on the world market and in political arenas. What has it meant for startups? We asked Simon Bond, Innovation Director at SETsquared Partnership how it has affected startups in England and the United Kingdom.

There will be a lot more startups but scale ups, scale ups in sectors, which are a part of our industrial strategy, will be a major opportunity for SETsquared, or SETsquared’s universities so I think that you’re going to see more of the same but deeper into sectors. More money raised, more successful startups.” Simon Bond, Innovation Director, SETsquared Partnership, Bath, United Kingdom

We hear you, Simon, and the evidence shows that 2017 has been a record year for startup investments with a 78.2% increase in funding for startups over 2016 (Source: Dealroom.co). Fintech, in particular, has been the sector pulling the largest piece of the pie with $2.9 billion in funding. The technology ecosystem places great value on startups and encouraging innovation. The government of United Kingdom has been reassuring the country’s tech industry that Brexit will be soft on them and not affect their ability to hire skilled foreign workers or impede their business in the EU.

Why Fintech?

Financial Technology firms located in the United Kingdom are expecting higher than average growth over the next three years. One of the reasons for this is that the UK has taken a leadership role in reshaping global finance in terms of regulation. No doubt this is actually part of Brexit itself, creating interest in cross border currency functions. In fact, the top invested sub-sectors of Fintech in Britain looked like this:

  • Cross border payments
  • Digital small business lending
  • Peer-to-peer small business loan coordination
  • Online investment trading
  • Mobile Banking
  • Digital banking
  • Money transfer operators
  • Foreign exchange providers

The United Kingdom raised enough venture capital to take second place worldwide, just behind the US and overtaking China in the fintech sector. Seeming to shrug at Brexit, fintech investors flocked to London and see the United Kingdom overall as having a continued focus on policy and talent that promote growth.

What UBI Global recommends

Planning in the current uncertain environment of the United Kingdom can be difficult, but planning is exactly what needs to happen. Well thought-out business plans and contingency plans will serve not only your corporation well during the Brexit change but will also help guide any startups you work with. Additionally, as you can see by the boom in the fintech sector, it’s important to keep an open mind and a “glass half full” approach. Fortunately, incubation programs such as SETsquared have been through the ups and downs of market changes and are prepared to deal with any uncertainty.

UBI Global has named SETsquared a Top Program and we believe that the United Kingdom remains one of the world’s best environments for startups. UK startups will overcome any challenges presented by leaving the EU and thrive in their new environment. The future may be uncertain and difficult, but startups are resilient. UBI Global supports corporations who are looking for the right incubation program and startup to help them down the path of innovation.

 

 

 

A successful incubation program thrives on a robust environment, but sometimes one of the first tasks a program has is to begin building an ecosystem from scratch. Since arriving on the incubation program scene in 2002, INiTS has built an exciting, healthy ecosystem from scratch. In this article, we will share some of the knowledge imparted by Irene Fialka, CEO of INiTS, on building an ecosystem from scratch.

“INiTS was built in 2002, in Vienna, as an incubator, it was the first incubator there, and there was no ecosystem. Now, 15 years later, Vienna has really thrived as a startup hub in Central European region and the path to get there was stony, was difficult at the beginning.”– Irene Fialka, CEO of INiTS, Vienna, Austria

What is a business ecosystem?

A business ecosystem is a network of entities that get involved with each other, either through cooperation or through competition, with the end goal of delivering a specific product, idea or service. These entities can include distributors, customers, suppliers, competitors, government agencies, universities, and so on. The prevailing idea is that each entity affects and is affected by the other members of the ecosystem. The relationship is constantly evolving and all members must remain flexible for the ecosystem to survive and thrive.

What is a startup ecosystem?

Running parallel in many ways to a business ecosystem, a startup ecosystem environment also involves multiple entities who network together with a common interest or goal. This goal happens to be creation and scale of new startup companies. Not only are the incubator programs involved themselves, but they must also involve startups as well as various types of organizations, both physical and virtual. These organizations include funding organizations, universities, research organizations, legal service providers, financial service providers and large corporations.

“Incubation is really the starting point of new products and services, of innovations, in particular university associated and university managed business incubators. And these, they are the sources, so to speak, of innovation. And we can help corporates in their open innovation strategy in order to get faster, more efficiently, take up pace in open innovation.” Irene Fialka, CEO of INiTS, Vienna, Austria

What is important to the startup ecosystem?

There are three considerations to a healthy ecosystem: relationships, strategy and value. A dynamic incubator ecosystem should include a diverse range of partners, some of whom may even compete with each other. For example, when needing to develop a new fuel cell technology, BMW and Toyota collaborated and combined resources to develop this technology together. They have since renewed their partnership beyond the initial 2011 partnership. In recognizing each other’s strengths and moving past the fact that they compete in the same market, both companies have enjoyed a higher success in high-tech sports cars.

Let’s take an in-depth look at those three considerations for a healthy ecosystem.

Relationships

More along the lines of alliances, the relationships that business incubators build must be diverse, as Irene has highlighted, but they must also complement each other. A successful program will be able to forge partnerships based on competencies and resources brought to the table by each entity. In turn, the incubation program must be able to ensure the startup will meet the goals set by the ecosystem. No matter the reason for each entity’s participation in the ecosystem, it is important that they all understand what their role is. The incubation program must balance trust and control to deliver a successful outcome on time.

“…being diverse, is very difficult in the end but is an asset on the other hand. Handling the diversity can also be learned from us.”– Irene Fialka, CEO of INiTS, Vienna, Austria

Diversity is important when considering participants in the startup ecosystem. In today’s tech-driven world, physical location doesn’t matter and shouldn’t stop any entities from participating. Digital platforms can connect participants and incubation programs are able to mediate relationships in incubator ecosystems as if they were in the next room. Incubator programs now have the freedom to consider unexpected partnerships within the industry, adjacent to the industry or even far-neighboring industries. Key point: quality is more important than physical location.

Strategy

In the beginning of the ecosystem, relationships have been forged and each entity knows their role and how they will be responsible for creating value for the ecosystem. The challenge for the incubation program is creating and exchanging sustainable value for all the participants. This complex relationship is known as a deliberate ecosystem in the world of business, and it is driven by a single entity, which is the incubation program.

Common goals, shared interest and strategies are nothing new in the business world. There is one major difference in incubation programs, and that is the openness of the ecosystem. Participants in a startup ecosystem must be open to change, including the addition of new participants and disruptions to existing relationships, partner roles and program value.

Value

We touched on this in the relationship paragraph: the value to the ecosystem of each partner and the value of the ecosystem to the participants. Over the lifecycle of a startup ecosystem, different phases of evolution occur. Through benchmarking, such as UBI Global’s World Benchmark Study, incubator programs are able to define the success of the ecosystem as a whole. They are also able to determine the value of the ecosystem for each partner including the startup.

Think of value as a seesaw; new startup ecosystems have more value in the partnerships rather than in the program itself. As the startup company grows with participation and innovation, the incubator program value becomes level. During scale up and maturity, the scales tip in the favor of the ecosystem and the partners are now realizing the value of the program in tangible ways. This is the reason that the ecosystem value itself means so much when analyzed. This value is a direct reflection of the size and performance of the ecosystem overall.

What does having a strong startup ecosystem mean?

“The opportunities of business incubation are to build more bridges to corporates, to existing companies to existing markets. Incubation is really the starting point of new products and services, of innovations, in particular university associated and university managed business incubators.”– Irene Fialka, CEO of INiTS, Vienna, Austria

For an incubation program to build a strong startup ecosystem, in addition to monetary-based value being shared across the program, the sharing of other valuable resources also occurs between the participants. This includes strong reputation, important services, insightful information and other forms of value, depending on the needs of the ecosystem. Essentially, the term “value” is not always defined in terms of profit and loss. Strong startup ecosystems increase the odds of a startup company’s survival. Not only about monetary value provided, a strong ecosystem must also have diverse talents and collective knowledge on the table. This means that any city in any country in the world can grow a successful startup ecosystem. Will yours be next?

UBI Global is able to offer Members guidance on how they can become more efficient and competitive. Whether you are part of a robust ecosystem or building an ecosystem from scratch, count on UBI Global for information and resources you can’t find anywhere else. We combine valuable tools, assessments and networking to incubation programs all over the world, and have created an extensive network of peers, corporations and startups. To become a Member of UBI Global, see our membership page here. To purchase a copy of our World Benchmark Report or Case Studies for 2017/2018, click here.

 

 

 

Businesses who want to innovate need to open themselves to new ideas beyond their current reach. Unfortunately, many corporations today have fortress-like structures, with rigid styles. These corporate standards are for a good reason; to weather the storm of competition in the marketplace while keeping their brand top-of-mind. However, as far as innovation goes, such a setup is just too restrictive. In this article, you will get to know how to connect your corporation with the perfect disruptive technology to spark innovation and still respect your corporate standards and brand reputation.

 

What is disruptive technology?

Disruptive technology is one that breaks ground with a new product or service and creates a completely new market. Being new, disruptive technology may not be refined enough to perform by itself, as it appeals to a small audience at first. A few examples of disruptive technologies that grew into blockbuster markets are:

  • Automobiles disrupt horse and carriages
  • The personal computer disrupts practically everything
  • Windows operating system disrupts basic operating systems
  • Email disrupts communication of many kinds
  • Cellular Phones followed by PDA’s and both replaced by Smartphones, which also disrupted MP3 players, pocket cameras, calculators, GPS systems and others
  • Mobile computing and laptops
  • Cloud computing
  • Social networking

When these technologies hit the market, they disrupted sustaining technologies. Sustaining technologies are what corporations are designed to work with. By knowing their market, cultivating customer relationships and developing technology based on their core competence, corporations can chug along just fine. When it comes to capitalizing on potential cost-savings and efficiencies or new markets, corporations often don’t know where to start. There could be a large capital investment required to develop disruptive technologies or the corporation may not even recognize the value of disrupting the status quo.

 

What are the trending technologies for startups?

UBI Global has benchmarked hundreds of business incubator programs and discovered that the cutting-edge concepts and innovations that their client startups are involved in reflect today’s top trends. Here are the trending technologies from our World Benchmark Report 2017/2018:

Source: UBI Global World Benchmark Report 17/18

Whatever industry your corporation is in, be assured that exponential growth of disruptive technologies will shift the business landscape, either with you or around you. The most efficient, effective way to market with new technologies under your respected brand is working with a startup company. Fortunately, finding the right startup and incubator program to work with doesn’t have to be a monumental task.

 

Corporations and Startups; a match made in heaven

Corporations and startup companies were made for each other, but neither may recognize it at first. The two may run at different speeds or have different end goals. They may have trouble communicating between the structured corporate and the unstructured startup. That’s where a business incubation program comes in. A business incubation program builds the bridge that makes corporate and startups work together. The program provides structure and goal setting, in conjunction with the corporation’s style and preferences. The program also gives the startup a healthy start for growth before the corporation even gets involved by providing workspace, staff, mentorship and more.

Both startup and corporation can benefit from being involved with university-linked business incubation programs. The university setting provides superior research and quality staff that a startup would have difficulty incorporating on their own. The vast university support and resources benefit the growth of the startup into an asset for the corporation.

 

We are ready to get started; what’s next?

Get in touch with UBI Global, the world leader in making connections between corporations, startups and the programs that nurture them. We have gathered the data, researched and benchmarked the top programs in the world, ready to match you with the right disruptive technology to break through a new market.

Among the Top Programs benchmarked by UBI Global was The DMZ at Ryerson University, a university-managed business incubation program located in Toronto, Ontario, Canada. A highly selective program, The DMZ receives 856 applications per year on average but only accepts 56 of these.

UBI Global supports corporations in finding the right incubation programs and startups to help them satisfy their unique innovation needs. Business incubators like The DMZ have vetted the startups and found the best and brightest in several industry sectors who are ready to take the next step. This matches perfectly with corporations who are looking to invest in new ideas. The path to opening a profitable, new market just became much shorter.

 

 

“It’s all about being able to connect globally with the right people, the right incubators, and the right accelerator programs to support our companies’ successes.” – Abdullah Snobar, DMZ, when asked what it meant to be a Top Program. To see Abdullah’s full video interview, please click here.

UBI Global, through our network of incubation programs, their startups and universities, can introduce your corporation to new, impactful innovation in less time that it takes to develop it on your own. Create a win-win situation; your corporate experience, knowledge and brand combined with disruptive technology and product evolution. Our friendly staff is always available to consult with you on sponsoring or partnering with startups or incubation programs. Get in touch with us today by emailing nick@ubi-global.

For more information about the World Benchmark Report 2017/2018, find the report page here.

 

There are quite a few well-funded business incubators and accelerators out there in the world, with generous budgets and even surpluses. Have you met one, though? Our data demonstrates that a majority of university-linked business incubation programs operate on a very small budget. How do these programs survive and thrive on such a small amount? This article will give you the details so that you can apply these best practices to your own budget.

 

Median budget size

According to the World Benchmark Report for 2017/2018 recently published by UBI Global, the university-linked incubation industry is dominated by programs with smaller budgets. In fact, the median program in the benchmarked programs had just $232 thousand to fund their program operations. A full ten percent of the benchmarked programs operate on budgets that are $50 thousand or less.

 

Allocation breakdown

Most business incubators and accelerators find that their budget allocation is led by human-capital expenditures in staff salary and human resources expenditures. In fact, forty-five percent of the median program’s budget is spent on this budget item. This expenditure is followed closely by consultants and contractors, which is a twelve percent line item expenditure on average, which is also a human-capital related expense.

 

Sources of funds

The variety of fund sources for incubation programs in our benchmark was as varied as the programs themselves. It shouldn’t come as a surprise, however, that the majority of the financial support was through governmental programs at twenty-eight percent. This was followed by a thirteen percent fund source attributed to university contributions.

 

Budget Tip #1 – Think outside the fund source box

One of the most intriguing discoveries in our World Benchmark Report for 2017/2018 was how business incubators and accelerators are developing their business models to supplement their budgets with self-generated revenue. If we divide the business incubators and accelerators that participated in our benchmark into not-for-profit and for-profit programs, the revenue streams look like this:

 

Let’s take a look at two of the largest possibilities for fund sources for both not-for-profit and for-profit business incubator and accelerator programs:space rental and corporate sponsorship.

Space rental opportunities

Business incubators and accelerators who do not invest in their startups, mainly not-for-profit programs, can still seek revenue opportunities through space rental. Programs are able to form a best-practices guideline and base rental prices on the following criteria:

  • Target market – rental subsidies can be sponsored by corporations looking for startups in particular technological areas or job creation potentials.
  • Exit rules – programs have regular progress meetings with tenant startups, keeping them on track to move to larger, more independent spaces of their own thus keeping the space turnover to new startups at a high rate.
  • Graduated rent – some programs offer lower rents at the beginning of the startup’s incubation or acceleration period, gradually rising over time with the success and growth of the business. Highly specialized programs in biotechnology, for instance, may offer longer tenancy agreements due to the nature of their business.
  • Aftercare services – graduates of business incubators and accelerators are in at their most vulnerable when leaving the safe rental space of the program. Offering aftercare services to graduating startups gives the long-term benefit of keeping the graduate local as well as mitigates any impact from the startup leaving the nest.

 

Corporate sponsorship opportunities

Our Best Practices 2018 report highlighted another opportunity for business incubators and accelerators to maximize their earning potential. According to several of the programs in our report, corporate sponsorships have become an integral part of their budget strategies. Take for example our exclusive interview with Dr. Derek Newton, Associate Vice President of Innovations, Partnerships and Entrepreneurship at the University of Toronto Entrepreneurship program. Dr. Newton, when asked how U of T Entrepreneurship decided on their current sources of funding, said the following:

“…we created a management committee with broad representation of senior leadership across key faculties and our three campuses. This collaborative and diverse group reflects our deep commitment to support and advance entrepreneurship across the university.”

By involving peers at U of T, Dr. Newton has leveraged the University’s reputation to the corporate world and given credibility to the startups in their business incubator program. U of T has an excellent reputation in research excellence. The U of T has over 80,000 students, which appeals to corporate sponsors as a talent base. U of T Entrepreneurship, as an incubation program, is able to attract international sponsors to themselves or their other entrepreneurship hubs due to the quality of their research and of their students.

 

You need to know more

UBI Global has had a mission since our inception in 2013; to help business incubators and accelerators become more efficient and more competitive. We offer a range of membership levels that give your incubator access to our worldwide network of business incubators, accelerators, universities, programs and corporate sponsors.

Whether you are interested in becoming a member for the first time or looking to rejoin our network, have confidence that the information and resources available from UBI Global cannot be found anywhere else. Membership in UBI Global at the Pro level includes a valuable set of tools such as discounts and priority seating at the World Incubation Summit, the most important networking event in the world for business incubators and accelerators.

Pro members are also invited to participate in our World Benchmark Assessment 2018, which provides a valuable benchmark on their program’s current impact and performance against all participants in the study. Going Pro with your UBI Global membership will give you the information to turn your program into a top-performer with worldwide exposure to some of the biggest corporations in the world looking to invest in entrepreneurship.

For more information on UBI Global Membership, see our web site here. To purchase your own copy of the World Benchmark Report or Case Studies for 2017/2018, see the reports page of our web site. If you have questions on what UBI Global can do for you and your program, our friendly staff is here to help.

As a professional in the corporate world, your “to do” list is longer than your daily agenda. On top of this, you are expected to network with peers, stakeholders and competitors. There just doesn’t seem to be enough hours in the day to create that connected ecosystem that all the professional development magazines tell you that you need. Before you panic, consider the facts; not all connected ecosystems are created equal.

 

What is an ecosystem?

In terms of startup companies, an ecosystem is a group of people interacting with a common goal; to create and scale up a new company. Included in the ecosystem are universities, support organizations such as incubators and accelerators, corporate sponsors, research professionals and service providers such as lawyers and accountants.

Working together, this ecosystem is in control of the following tasks:

  • Creation of ideas
  • Inventions
  • Research
  • Advisement
  • Mentorship
  • Investment

Participants in the ecosystem link themselves through activities, interactions, events and locations, either virtual or local. Resources such as time, money and specific knowledge skills are essential to the ecosystem and freely shared through interaction. Solid interaction between advisors, investors and mentors to the creators and inventors strengthens the bond of the community.

“We know that founders in this highly regulated sector must rely on the expertise of others and we believe Chicago has more industry veterans and experience than any other city.” – Howard Tullman, CEO, 1871, Chicago, Illinois USA

Howard was speaking on the Fintech sector for the Global Startup Ecosystem Report 2018 (GSER), released in partnership with Global Entrepreneurship Network. Financial technology or fintech is one of the fastest growing sectors in the startup world. As the CEO of one of UBI Global’s Top Programs, Howard knows that relying on expertise of mentors and advisors is the key to success in this and other sectors.

What is local connectedness?

A new category in 2018’s GSER is Local Connectedness. Defined as a sense of community, local connectedness is an ecosystem with a high level of local relationships. These tight-knit ecosystems have higher indictors of overall success in performance values such as startup output and value. Though a startup might exist in a small local market and have a global target, their interaction with the local community investment and expertise is what propels them to higher success.

Startups that introduce innovative new ideas and disruptive technologies to large corporations don’t only exist in big, mature ecosystems. The ones that rise to the top are focusing on high-level local relationships and expertise. The GSER also quotes Dan McEleny, co-founder of Gfycat, an AI tech startup fostered by TEC Edmonton, a UBI Global Member and Top Program:

“When asking people in Edmonton for help, their response isn’t, ‘What’s in it for me?’. Instead, they ask, ‘how can I help?’ It’s incredible to have that kind of support when you are just starting out.” – Dan McEleney, Co-Found at Gfycat

Fintech, Healthtech, AI, Adtech; while all these exciting, high-growth sectors require technology, they also require knowledge of other industries that are unrelated. A startup founder with the next big idea in healthtech, for example, may spin their wheels without health care industry expertise. Where can they find mentorship, sponsorship and guidance? Through networking, of course. Beyond building quality relationships with investors, experts and future customers, creating a locally connected ecosystem pays off in the success of the startup through key resources such as experience, insider knowledge and know-how.

Why is Google fostering local connectedness?

Google has recognized the value of a connected ecosystem that provides support on different levels to a startup company. Last month, Google, one of the largest companies in the world, announced that it is launching an investment capital program that will include a wealth of resources. Startups who build applications within the Google ecosystem are, of course, the focus of this community. By creating a community and providing startups with advice from engineers, product experts and designers, Google will give access to new tools and features as well as promotional support.

The corporate giant is putting no cap on the investments, saying they will invest as much as they see fit. Google is doing all this through a Community Group program that will support the startup every step of the way to give them traction in the world market. These close-knit relationships will rely on milestones to prove the engagement with users and community. A system that includes meetings, knowledge, training, recognition of success, branding support and networking is mapped out for every participant.

What does this mean for corporations?

Google hasn’t gotten to be this successful by being late to the party. Instead, they set the trends and encourage disruptive technologies that make industries think differently. A solid, local community that shares knowledge and fosters new ideas is the key to global success. As a corporation, it can be complicated to find quality startups as well as a fantastic business incubator or accelerator program that will help you foster local connectedness and launch an exciting new part of your company.

Fortunately, UBI Global is an expert in making connections for corporations in the world of business incubation and acceleration. We are also the world leader in ranking, benchmarking and researching these programs. In the UBI Global World Rankings 17/18 report, we compiled data and ranked the top business incubators and accelerators according to their achievement scores. A portion of the scores is based on how successful these programs were in creating value for their ecosystems. Below, we have listed the top three in each program category:

 

University Managed Incubators – these programs are directly operated by one or more universities. Listed below are the top three performers, who outrank their global peers with regard to the value they contribute to the ecosystem, the value they provide to their startup clients and how attractive they have made their program for sponsors.

Ranking Program Location
#1 The SETsquared Partnership United Kingdom
#1 The DMZ at Ryerson University Canada
#3 PoliHub Italy

 

University Affiliated Incubators – these programs are affiliated with one or more universities but are not directly managed by them. Listed below are the top three performers, who outrank their global peers with regard to the value they contribute to the ecosystem, the value they provide to their startup clients and how attractive they have made their program for sponsors.

Ranking Program Location
#1 1871 United States
#2 YES!Delft Netherlands
#3 İTÜ Çekirdek Turkey

 

Incubators Collaborating with Universities – these programs closely collaborate with one or more universities but have no formal affiliation or management with them. Listed below are the top three performers, who outrank their global peers with regard to the value they contribute to the ecosystem, the value they provide to their startup clients and how attractive they have made their program for sponsors.

Ranking Program Location
#1 Guinness Enterprise Centre Ireland
#2 Montpellier BIC France
#3 Shell Iniciativa Jovem Brazil

 

University Linked Accelerators – these programs are linked in some way with one or more universities, either by affiliation, management or collaboration. Listed below are the top three performers, who outrank their global peers with regard to the value they contribute to the ecosystem, the value they provide to their startup clients and how attractive they have made their program for sponsors.

Ranking Program Location
#1 York Entrepreneurship Development Institute (YEDI) Canada
#2 Entrepreneuriat Laval inc. Canada
#3 TEC Edmonton Canada

 

UBI Global will find you the best performing business incubator or accelerator program that will give your company with fresh, new ideas and put you miles ahead of the competition. With member programs in over 70 countries, we can offer you exclusive sponsorship of a locally connected, idea-rich startup and program that accurately suits you goals and requirements.